Munis slip in quiet trade; Maryland’s Montgomery County prices; Spokane prepares green bonds

By Cristal Cody

Tupelo, Miss., Nov. 7 – Municipal bonds ended 1 basis point to 2 bps weaker on Friday in thin trading ahead of the upcoming short holiday week, market sources said.

The bond markets will be closed on Tuesday for the Veterans Day holiday.

“Munis didn’t even get started today,” a trader said. “Friday is usually quiet, and this was more quiet than usual. Nothing was going on.”

Municipals traded 1 bp weaker on the 2022 to 2040 maturities and 2 bps wider on the 2041 to 2044 maturities, the trader said.

Treasuries recovered on Friday after the Labor Department reported that 214,000 jobs were added in October, below the 235,000 forecast.

The 10-year benchmark Treasury note yield dropped 8 bps to 2.31%, while the 30-year bond yield fell 6 bps to 3.04%.

Montgomery County prices

Muni primary activity was strong over the week with about $8 billion of issuance, including a $797.99 million offering of general obligation bonds (Aaa/AAA/AAA) from Montgomery County, Md., according to sources.

The county sold $500 million of series 2014A consolidated public improvement bonds due 2015 through 2034 with 5% coupons on the short end and 4% coupons on the long end of the offering, according to a pricing sheet.

The county priced $297.99 million of series 2014B consolidated public improvement refunding bonds due from 2016 through 2029 with 5% coupons across all maturities.

The bonds priced competitively.

Davenport & Co. LLC was the financial adviser for the offering.

Proceeds will be used to finance the costs of capital projects in the county, to refinance all or a portion of outstanding bond anticipation notes and to refund some outstanding G.O. bonds.

Deal pipeline

Primary issuance in the week ahead is projected at $6.1 billion, a market source said.

California is expected to lead the pricing action with a $1,204,325,000 offering of various purpose G.O. bonds (Aa3/A/A), according to a preliminary official statement.

The deal includes $270 million of federally taxable G.O. bonds, $304,325,000 of tax-exempt G.O. refunding bonds $630 million of tax-exempt G.O. bonds.

The bonds will price competitively on Thursday.

Public Resources Advisory Group is the financial adviser.

Proceeds will be used to fund projects and pay some of the state’s outstanding taxable G.O. commercial paper notes.

Spokane to offer green bonds

Later in November, the City of Spokane, Wash., plans to offer $175.24 million of water and wastewater system revenue bonds, according to a preliminary official statement.

The series 2014 green bonds (Aa2/AA/) have serial maturities from 2015 through 2034.

The bonds will price via a competitive offering on Nov. 18.

A. Dashen & Associates is the financial adviser.

Proceeds will be used to finance capital improvements to improve the health of the Spokane River, protect the city’s drinking water aquifer and for other improvements to the water system.

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